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Investments in Zimbabwean processing plants shape global energy transition

China has taken a substantial lead in the global race for lithium, as several major mining companies completed multimillion-dollar processing plant projects for this crucial mineral in Zimbabwe. Companies like Zhejiang Huayou Cobalt, Sinomine Resource Group, and Chengxin Lithium Group finalized the construction or upgrading of lithium processing plants in Zimbabwe in the previous year. The southern African nation boasts one of the world’s largest hard rock lithium reserves, making it an attractive destination for Chinese companies seeking raw materials for lithium-ion batteries used in various applications, from electric vehicles to solar panels.

Zimbabwe’s lithium reserves are now highly sought after in the global transition to green energy. With China already controlling the global lithium-ion battery industry and dominating much of the mineral processing, it has intensified efforts to procure lithium from Africa and other regions. This move has drawn attention from Washington, expressing concerns over Beijing’s influence on critical metal supply chains.

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Last year, African exports of lithium, primarily destined for China, saw a sharp increase between August and November. This surge coincided with the commissioning of processing plants by various companies, leading to a substantial rise in Zimbabwean spodumene concentrate exports to China. According to data from Benchmark Mineral Intelligence, these exports nearly quintupled to 177,000 tonnes in 2023, compared to 38,000 tonnes in 2022.

Adam Megginson, a price and data analyst at Benchmark Mineral Intelligence, anticipates that 2024 will be an even more significant year, with major projects set to increase Zimbabwe’s lithium capacity threefold compared to 2023. While current facilities in Zimbabwe focus on producing spodumene or petalite concentrate, further refining occurs in China. However, there is growing political momentum, not only in Zimbabwe, to encourage more refining capacity within the country to capture added value domestically.

Despite Zimbabwe’s rapid growth in lithium raw materials capacity, its overall impact on the global lithium market remains limited. Benchmark estimates that Zimbabwe will account for 6% of the total lithium raw materials market, which is projected to be nearly 1.2 million tonnes of lithium carbonate equivalent (LCE) in 2024. China currently leads the developments in African lithium projects, and Benchmark forecasts that Africa will contribute a 14% share of global lithium raw materials supply by the end of the decade, up from 4% in the previous year.

In 2022, Zimbabwe implemented a ban on raw lithium ore exports, prompting companies to establish local processing facilities before export. Notably, China’s Sinomine Resource Group commissioned lithium processing plants in Zimbabwe’s Masvingo province, contributing to the significant boost in lithium exports. With major Chinese companies investing in lithium projects in Africa, the continent is poised to play a crucial role in restoring long-term balance to the lithium market.

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